Azerbaijan, Baku /corr. Trend I.Khalilova / The Law on the Public Budget 2008 of Azerbaijan, the limits the foreign borrowings at AZN 2.4bln as compared to AZN 1.2bln in 2007, as approved by the President of Azerbaijan. The upper limit of the internal State borrowings was determined at AZN 500mln as compared to AZN 300mln in 2007. The internal borrowings were increased, due to the plans to increase the amount of placing T-bills in order to fight against the inflation.
The double increase in the external borrowings resulted by the plans to place Eurobonds. According to Samir Sharifov, the Azerbaijan's Minister of Finance, the issue price of the Eurobonds may be increased up to $500mln from$300mln as offered previously.
Nearly $600-700mln are planned to be attracted from the European banks for the construction of the Alibayramli Thermal Power Station, $300-400mln for the road construction, nearly $260mln from the Japanese Bank for the international cooperation on the improvements to the water supply system, and $300mln to support trade and transport and $130mln preferential credits from the World Bank. The additional funds may be directed towards resolving the ecological problems in Absheron peninsula and the other projects, particularly in the road construction.
Until 2005, the limit for the foreign loans was set at $200mln. However, afterwards, due to the necessity of borrowings for the realization of large-scale projects, the limit was increased up to $1.2bln.